A Workforce Housing Tax Credit Bill Advances in Montana House
A significant push for affordable housing in Montana is making progress with the advancement of House Bill 21, a workforce housing tax credit bill. Modeled after the federal Low-Income Housing Tax Credit, this state initiative aims to alleviate Montana’s ongoing housing crisis and reduce the high cost of homes. The bill, backed by bipartisan support, proposes tax credits managed by the state for affordable housing developments. Proponents argue that it could significantly boost housing production.
Rep. George Nikolakakos, R-Great Falls, emphasized that the absence of such a program since 2019 left 1,300 housing units unbuilt. He highlighted the program’s strong return on investment potential, describing it as a means to get “shovels in the ground.” The program plans to distribute $1.5 million in credits annually over six years, according to legislative fiscal analysis.
Sponsor Rep. Larry Brewster, R-Billings, acknowledged the bill’s expense but stressed its necessity given Montana’s housing situation. He assured that funds are only released upon project completion, with affordable rents locked for 30 years. Brewster explained the bill fills financial gaps not covered by federal credits or bank loans, effectively bridging the shortfall.
Rep. Mark Thane, D-Missoula, supported the bill, citing the success of existing housing tax credits in addressing severe housing shortages. He noted projects struggle to meet financial viability for low-income residents. The Montana Housing Coalition defines “affordable” as when a household spends no more than 30% of its income on housing, including utilities.
Despite bipartisan backing, some Republicans, like Rep. Jed Hinkle, R-Belgrade, opposed the bill due to its $9 million peak cost to the general fund. Hinkle argued government intervention disrupts free market efficiency. Nonetheless, developers, housing advocates, and business community members voiced strong support, highlighting the role of credits in overcoming rising construction costs.
Criticism came from the Montana Society of CPAs, opposing the bill for complicating the tax code. They suggested direct financial support instead. However, proponents like Sam Sill from the Montana Bankers Association argued the credits aid the “working poor” by making housing construction feasible amid high costs.
Missoula Mayor Andrea Davis and Helena Housing Authority’s Michael O’Neil also expressed support. Davis equated housing infrastructure to essential community facilities, while O’Neil cited a study showing tax credits stimulate significant economic activity. The bill requires one more House vote to pass and has garnered endorsements from various organizations, including the Montana Chamber of Commerce and the Montana League of Women Voters.
